This just goes to show you how much prices are based on speculation and worry. Over the past few years we have seen oil and gas prices skyrocket from hurricane activity in the Gulf of Mexico. Hurricane Katrina is a prime example. Now with Hurricane Dean going through the area, oil and gas prices have fallen. Once news broke that Dean would miss U.S. oil operations in the gulf and on the gulf coast, oil prices began to fall.

It's almost as if the price was just waiting for news one way or the other. If Dean were going to affect U.S. oil operations, then worry would probably drive prices to new highs. However, the price level is breathing a sigh of relief that this is not going to happen.

It's almost funny to watch how the price responds so drastically to news like this. In the aftermath of Katrina, I didn't notice any gas stations running dry in my area. I guess there WAS enough supply left to fuel the country. However, you wouldn't have guessed it by the price levels. Price levels should be determined by SUPPLY and DEMAND. After Katrina, I've heard that demand actually decreased because people thought they'd do their part to help conserve our "low supply". So if demand decreased and price skyrocketed, supply must have taken a HUGE nosedive, right? But if that were true, wouldn't we have seen lines at gas stations, or stations that were running out of gas? I don't remember seeing any of this. It appears that the price levels of oil and gas are based more on fear than actual economics.